Commerce Next Digital commerce is a journey · licensed software-in-a-box to SaaS subscriptions and...

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Commerce Next: Digital commerce is a journey Technology Institute At a glance Businesses don’t need a digital strategy. They need a business strategy for the digital age November 2015

Transcript of Commerce Next Digital commerce is a journey · licensed software-in-a-box to SaaS subscriptions and...

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Commerce Next: Digital commerce is a journey

Technology Institute

At a glance

Businesses don’t need a digital strategy. They need a business strategy for the digital age

November 2015

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88% of Tech executives consider digital investments to be a high to medium level priority for their organization

PwC’s 2015 Technology Digital Commerce Survey

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PwC 1

Overview

The ability to market, sell and serve

through digital means has become a

key expectation of all enterprises, but

a variety of industry challenges

complicate those efforts at

Technology companies.

An extensive network of resellers

and integrators are involved in the

selling and support process, which

creates technical and operational

complexity;

High-tech industry customers

have experience in technology and

thus have high expectations for

digital capabilities across web,

mobile, and social;

Companies are rapidly deploying

new products and services, and

need to provide easy and

immediate access to pre-sales

information, evaluation products,

and current entitlements;

The time has come for a new

transition, one in which companies

focus not on a digital strategy, but

rather a business strategy for the

digital age. Because of their unique

position within this inflection point,

Technology companies have the

potential to take the lead in making

digital commerce work, work well,

1 PwC’s 2015 Technology Digital Commerce Survey

and inspire customers. That means

understanding the various facets of

digital commerce, while carefully

engaging customers and

enabling partners.

Technology companies find

themselves in a uniquely enviable

position these days. New digital

technology has transformed almost

every element of every business. But

what enterprises have experienced

and delivered up to now is only a

small percentage of what’s possible.

The transformation toward seamless

digital capabilities – and especially

digital commerce – has only

just begun.

In PwC’s 2015 Technology Digital

Commerce Survey, an overwhelming

88 percent of Tech executives

consider digital investments to be a

high to medium level priority for their

organization.1 Achieving a frictionless

state of digital commerce requires

careful business planning,

operational excellence, thoughtful

customer experiences, and a flexible

technology architecture that can meet

current and future needs. Companies

need to start thinking not just of

transactions but of the entire

customer lifecycle. For Technology

companies, addressing this lifecycle

means accommodating more moving

parts than some other industries face.

For instance, Technology companies

tend to have extensive networks of

resellers, partners, and systems

integrators involved in the selling and

support process. Frequently, these

are geographically organized,

necessitating insights into culture,

currency, compliance, and other

concerns. Companies must think

through carefully how to engage

directly with their customers without

upsetting their partner ecosystem. In

addition, companies must think about

the tools they provide their partners

to help them conduct business

more simply.

Technology companies find themselves in a uniquely enviable position these days

Technology companies also tend to

have highly complex product

offerings. These may be hardware,

software, or systems that combine

both. These offerings may involve

complex configuration options,

The Commerce Next series provides PwC’s perspectives relative to the trends and challenges businesses should

consider to remain competitive in today’s evolving digital marketplace. PwC has identified a multi-phase customer

lifecycle that is an important aspect of digital commerce. In this paper, we look at diagnosing and solving

Technology companies’ commerce needs in a digital world. Commerce Next can help clients deliver the next

generation of commerce by focusing on the complete customer lifecycle in an any channel world.

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professional services, such as

consulting, and educational services,

such as training. The cost and

availability of those services may be

predicated on contractual discounts,

renewal programs, and entitlement or

license compliance. These challenges

separate digital commerce from

traditional e-commerce models found

in other industries.

By virtue of their frequent selling into

IT departments, Technology

companies face the blessing and the

curse that their customers have

extensive experience in technology.

This means they also have extremely

high expectations regarding digital

interaction. These customers have a

high propensity for doing research

either online or among peers long

before they identify themselves as a

prospect and engage with

salespeople. It’s entirely possible that

a Technology vendor without strong

analytics and social strategy may lose

business without ever having

a conversation.

In addition, Technology companies

themselves are strongly impacted by

technology itself. Just as in many

other industries, their business

models are changing. Their customers

can experience their products in more

ways than ever before. The industry

has moved beyond the days of

licensed software-in-a-box to SaaS

subscriptions and “freemium”

models. They can sample software in

trialware versions before buying it, or

even speaking with the company.

These options affect more than

Technology companies’ revenue

streams. They mean that these

companies must accommodate new

ways of doing business, not only at

the beginning of the sales and

deployment process, but also when it

comes time to renew contracts for

products and services.

But it’s important to note that

Technology companies themselves

are not immune from the evolving

digital landscape. They face

competition from new market

entrants – smaller companies with

fewer legacy products and cloud-

based point solutions. Free from

legacy constraints, they can be more

nimble. Their SaaS-based models

simplify installation and reduce

infrastructure costs. They target

influencers rather than buyers with

online evaluations and trials, and

they use the digital channel to keep

field sales teams small.

At the same time, customer

expectations are changing in the B2B

world. Enterprise customers are

consumers in their personal lives, and

they now have expectations based on

their B2C experiences. These

expectations range from easy access

to product information to complex

configuration, quoting, and pricing

online, to self-service portals. Like

consumers, enterprise customers will

look for information both from the

company itself as well as through

social channels. It is important

companies learn to be part of

the conversation.

Based on these reasons, Technology

companies face what may look like a

daunting challenge, one that to solve

it, requires understanding an

unprecedented number of

departments and capabilities. That’s a

big task, but one that – with the right

strategy – can be tamed.

Defining digital commerce

An important aspect of digital

commerce is its ability to encompass

and enfold the entire, multi-phase

Prism framework:

Discover

Transact

Fulfill

Care

Community

Technology companies need to look

at the elements in this lifecycle not

individually, but rather holistically,

and to do so in a way that creates a

completely customer-centric view.

This lifecycle in its ideal form is an

ongoing process, one in which the

customer discovers the vendor and

conducts the transaction, after which

the vendor fulfills the delivery and

provides service and support. As the

process continues, the customer

discovers more of the vendors’

products and services, and the cycle

begins again. Care is frequently

overlooked by Technology companies

as part of the sales and retention

strategy, causing them to lose repeat

business. Therefore, digital commerce

requires tight integration of

technology and business process

across business, IT, marketing, and

support teams.

Technology companies

themselves are not immune from the evolving digital landscape

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Discover

The digital channel is becoming

increasingly more important as the

source for generating new leads and

customer acquisition. Potential

customers will often use digital

channels to find and explore offerings

before engaging with field or inside

sales. They expect rich content that

goes beyond standard product

information and they expect

experiences tailored to their needs.

Customers expect easy access to

product information, case studies,

videos, and evaluation products.

Providing these types of capabilities

allow companies to potentially

identify leads earlier, while data

collection and analytics tools allow

companies to engage prospects with

targeted offers earlier in the

sales process.

Even more important, is the

information tracked consistently

across multiple channels, so that

representatives know whether

prospects have visited the website,

queried on social media about

products, or watched a corporate

video online. Transforming a

prospect into a customer means

having a better understanding of their

interests and interactions with the

company than ever before.

Transact

Technology companies should also

consider how to apply technology to

technology selling. Which parts of the

sales cycle can they automate, such as

self-service configuration of quotes?

The goal: automating as many

segments of the sales cycle as

possible, so that salespeople and

partner channels are focused on

productive selling activities rather

than time-wasting administrative

tasks.

At the same time, companies should

apply similar automation capabilities

to both partner enablement and

customer enablement. This means

allowing partners access to sales

systems, and enabling prospects to

design their own desired systems,

even from a pick-list, indicating as

much as possible their options for

other services, such as consulting

and education.

Fulfill

As Technology companies evolve

their products and enhance their

digital engagement with customers,

fulfillment becomes more

Prism: The multi-phase integrated framework

Transact

Fulfill

Care

Discover

Community

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challenging. It becomes more of a

consideration during both the

evaluation and post-sales lifecycle

stages. Companies must provide their

customers easy self-service access to

those products and services that they

are entitled to use. For cloud

providers, fulfillment is an ongoing

process that requires very high

availability. While fulfillment can be

challenging, the ongoing engagement

creates another opportunity to collect

data and engage with customers.

Care

As the preceding interactions have

changed, so too must support. Many

Technology companies are already

recognizing that support is more than

just resolving break-fix issues – it’s

an opportunity to engage with

customers. In addition,

understanding how end-users

consume products and services

provides companies with tremendous

opportunity to identify high-value

enhancements, engage with

customers, and proactively identify

and resolve support issues.

Thanks to the deeper insight

Technology companies have,

customers in turn expect companies

to be knowledgeable about their

relationships. For example, do

customers have self-service access

into purchase history, SaaS billing,

warranty and licensing expiration

dates (and have indeed checked

them)? If so, customers expect that a

2 PwC’s 2015 Technology Digital Commerce Survey

customer service representative won’t

waste their time repeating

information they already know.

In response to this new landscape of

digital interaction, many companies

have identified executives responsible

for customer success; that is,

ensuring that interactions throughout

the customer lifecycle are consistent

with both customer expectations and

the brand promise.

Community

Cultivating community is critical in

the digital age. Generating

interactions between the customers,

partners, and the company can

encourage the development of user-

generated content that’s mutually

beneficial. Give your customers and

partners a way to communicate

among themselves, while at the same

time use it as a way to discuss

products or new features that may

resonate with customers.

Many of today’s digital customers will

tap into their own social community

to make a decision about a product

before they choose to engage the

company’s call center. Others venture

to social venues to praise or put down

a product. Especially as a Technology

company, it’s vital to monitor and

participate in these conversations.

Companies that cultivate a sense of

community surrounding their brands

can mine insights worth millions

when it comes to reducing

interactions with call centers and

improving products and services to

increase revenue.

The ultimate goal of these activities is

to digitally integrate the customer

lifecycle, creating an end-to-end

customer experience that acts as a

competitive advantage for Technology

companies. Done well, such a digital

commerce strategy puts the

customers first and capabilities are

delivered through operational and

technical excellence. Tools should

remove friction from the process as

much as possible and enable all

participants in the process: prospects,

customers, partners, salespeople,

marketing staff, and the technical

support team.

Supporting an end-to-end digital commerce experience

As much as automation and self-

service capabilities can support a

digital commerce strategy, one cannot

be deployed solely on the foundation

of technology. Technology companies

must consider the many

organizational implications as well.

They need to address internal

organizational challenges and

confirm they do not constrain the

company’s ability to deliver digital

experiences. Digital commerce should

provide a single face to the digital

In the digital commerce world, Technology companies must be

able to embed and analyze processes across all stages of the lifecycle to measure business impact

Today, most customer support

remains high touch. Email and phone remain the most popular ways of providing support, but 60% of executives claim to have enabled online self-service for their digital customers.2

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PwC 5

customer, one that hides the

complexity and internal

organizational structures.

Operationally, everything from billing

to refunds needs to make a

customer’s experience seamless and

as convenient as possible. Enabling

employees to provide products and

services to customers across all

phases of engagement helps provide

the best experience possible.

For many Technology companies,

moving toward an integrated digital

commerce capability starts by

breaking down silos within their

companies. Only by breaking down

silos will they be able to increase

collaboration among internal and

external teams. And only by

increasing collaboration will they be

able to increase customer value,

improve customer experience, and

increase customer engagement.

Before companies can break down

silos and organize teams, companies

must define their business strategy

for the digital age. Companies must

identify who they want to be in the

digital space. Is your digital strategy

to educate prospects and enable

business partners; is your goal to

deliver pre and post-sale capabilities;

or is your strategy to provide direct-

to-customer capabilities that achieve

the multi-phase Prism framework?

How companies answer these

questions will influence

organizational structure, technical

architecture, marketing approach,

and channel strategy.

Another key issue to address: The

ability to drive meaningful business

decisions through data. Consistent

with the shift from transactional e-

3 PwC’s 2015 Technology Digital Commerce Survey

commerce to building a digital

relationship that serves entire

customer lifecycles, analytics – the

ability to track both micro and macro

patterns – become more important.

In the early days of e-commerce, we

looked at discrete statistics such as

net new visitors, page views,

conversion rates, and

cart abandonment.

In the digital commerce world,

Technology companies must be able

to embed and analyze processes

across all stages of the lifecycle to

measure business impact. Given the

complexity and cost of many

technology products, traditional

eCommerce metrics such as average

order value or cart abandonment, do

not apply. Companies must be able to

measure digital commerce’s ability to

attract new leads, assist in the

acquisition of new customers, and

retain existing customers. A well-

executed digital commerce strategy

should reduce the cost of sales,

reduce the cost to serve, and improve

customer retention.

Getting started on the digital commerce journey

While a thorough digital commerce

strategy requires a holistic

perspective, that doesn’t mean that

Technology companies’

transformations require an

enervating “boil the ocean” effort.

Creating a distinguished digital

commerce experience – one that

transcends simply adding more

technology – is an evolutionary effort,

not a revolutionary one. For the sake

of competitive advantage, of course,

it’s important to start the process,

especially since competitors are doing

so and catching up may be difficult

later. But the process can be broken

down into smaller tactics, using the

following leading practices.

Think about customer-

centricity. What kind of

experience do you want prospects

and customers to have? How can

you reduce or even better,

eliminate, friction and confusion

among processes? Indeed, each of

the following points should be

viewed through the lens of

simplifying the customer

experience. Lead with the

customer experience rather have

your current technology drive

the experience.

Identify digital champions.

Within each of the crucial

departments (sales, marketing,

support, IT, product development)

and among your partners, there

are likely people who thrive on

using collaboration to make

processes move faster and more

smoothly. Identify them and get

their input.

Experiment. Unleash your

champions to try pilot projects,

using tools they think will provide

the biggest payoff within the

shortest amount of time. Track the

results to get a sense of the

potential benefits.

Digital impacts revenue &

growth: Increasing sales is the primary objective of the digital channel by an overwhelming majority of Technology executives3

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6 Commerce Next: Digital commerce is a journey

Break down silos across

marketing, sales, and service.

Identify ways that these

departments can work better

together. Identify issues that crop

up regularly, and look for ways to

automate or at least speed

up resolution.

Set up an online community.

Give your customers and partners

a way to communicate among

themselves, while at the same time

using it as a way to discuss

products or new features that may

resonate with customers.

Encourage interaction and peer

discussions – and ask how

customers would like to

communicate with the vendor.

PwC works with companies

PwC works with companies, whether in technology or other industries to make the transformation toward a reliable, viable

digital commerce strategy.

The Commerce Next team works collaboratively to help solve business problems with digital solutions. We help our clients

define what’s next for their business: strategy and innovation, technology, user experience, operations, pricing, change

management, security and tax.

Prism is PwC’s framework to help clients evolve their digital commerce ecosystem by diagnosing and solving their

commerce needs in a digital world. The multi-phase framework analyzes the client’s capabilities across the commerce

lifecycle and the supporting business operations, all through an industry lens. It unpacks their current state capabilities

across a number of criteria and provides a benchmark for executing against an ideal future state digital commerce

ecosystem.

PwC’s consultative services start with a discovery of the desired customer experience, followed by an understanding and

mapping of the complex interactions of people, process, and technology involved in the customer lifecycle. This mapping

begins with operations and organizational structure, acknowledges technology and compliance needs, and then overlays

where they affect customer experience.

PwC can accelerate this process through the use of leading industry tools and accelerators. These help from strategy

through execution across the business and technical aspects of a digital commerce initiative. We help our clients make

the transformation toward a reliable, viable digital commerce strategy by using our design tools, leading industry

methodologies and practices for digital commerce, and by incorporating everything from user experience design to back-

end integration. The result is a solution that enhances customer experiences and increases business value across the

customer lifecycle. We have used this approach many times to help global Technology companies become more efficient

and increase revenues.

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www.pwc.com

© 2015 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

PwC US helps organizations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com/us.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PwC can help

For a deeper discussion on digital commerce, please contact one of our leaders:

Joseph Lamano

Principal, Digital Commerce Leader

408 817 4427

[email protected]

Let’s talk

Please reach out to any of our technology leaders to discuss this or other challenges. We’re here to help.

Pierre-Alain Sur

US Technology Industry Leader

646 471 6973

[email protected]

Kevin Healy

US Technology Assurance Leader

408 817 3834

[email protected]

Kayvan Shahabi

US Technology Advisory Leader

408 817 5724

[email protected]

Diane Baylor

US Technology Tax Leader

408 817 5005

[email protected]

Acknowledgements

The following PwC professionals contributed their experience and knowledge to produce this paper.

Todd McElfresh

Director, Digital Commerce

214 740 6748

[email protected]

About PwC’s Technology Institute

The Technology Institute is PwC’s global research network that studies the business of technology and the technology of

business with the purpose of creating thought leadership that offers both fact-based analysis and experience-based

perspectives. Technology Institute insights and viewpoints originate from active collaboration between our professionals

across the globe and their first-hand experiences working in and with the Technology industry. For more information

please contact Pierre-Alain Sur, US Technology Industry Leader.